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obama doesn't make the book because he was president. it's hard to say. clearly romney, whoever runs will break a religious barrier. the mormon or republicans will nominate the first catholic. that's important barriers. there's a power shift where catholics out of religious identity want to be become republicans. the fastest growing church in the country is the lds church. will that make them more legitimate in the eyes of the public? it's interesting. it will be a critical election. both parties are at an important turning point. obama losing, again, introspection. why did we lose? obama was too left. have to move to the center. whatever the lesson will be. same with the republican party with many divisions in it. go back to the senate? that's what huntsman said. now we're going to nominate a
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moderate and lose again, go back to the right. the republican party has a really important don't about which way the party's going to go, and whoever the standard bearer was this year, how they lost, and what they said will impact what the party will be like in the future. could be this year, but then again, it could be awhile. i'm not saying every loser impacted american history in a great way. parker who lost in roosevelt in 1904, nobody wrote a biography about the poor guy. some are forgotten quickly, but others have a great performance. we won't know for decades who that is. i think that's probably about it, and i certainly invite your other questions to discuss, and as andrea said, there's a little refreshment and hope you all come, and, again, thank you for the attention. it's been a delight to be here. it's a wonderful bookstorement thank you to c-span again, and thank you very much for coming. [applause] ..
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visible to watch any of the programs you see here online. type the author or book title in the search bar in the upper left side of the page and click search. you can share anything you see on easily by clicking share on the upper left side of the page and selecting the format. booktv streams live online for 40 hours every weekend with top nonfiction books and authors. >> hal weitzman says the move
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away from western-style globalization has put many south american countries on an upward economic trajectory, while the u.s. and europe struggle. is less about an hour and 15 minutes. >> -- this lasts about an hour and 15 minutes. >> financial times, midwest bureau chief. before that he was, reported for the andes in financial times. travel to colombia, venezuela, throughout the andean regions. he has written a very provocative book about how the changes of the global economy, the commodities have affected not only latin america's economy in the sense of their own sense of destiny on also affected u.s.
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policy. what we will do is will have hal speak about 10, 15 minutes about the book, and then we will have a discussion going from my immediate left, the managing director at hsbc, and felicia, who is master teacher at new york university. also adjunct professor at the latin american studies program at new york university. so i just want to give a shameless plug to the journal that we publish your, america's quarterly. but enough about me. hal, let's talk about her book. tell us about the conclusions you have in your book. why it's called a passionate cause a problem with their own members with a meeting of u.s. dominance in the region. >> thanks very much. enough about me, what do you
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want to know about me? well, thanks to the council of the americas for hosting this. thanks to you all for turning out this evening. i want to start with a question. could it be that the first time in history the united states needs latin america more than latin america needs the united states? now comcast your mind back -- cast your mind back to a decade ago, that question would seem absurd. the united states was the undisputed heavyweight champion of the world, the most powerful country economically, politically, militarily. why on earth would he need anyone, let alone a continent known for its economic crises,
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its political instability for having almost no global clout? well, how times have changed. and how used we have become to the fact of change. there's an old jewish joke i heard probably about 5000 times when i was growing up, and it's set in eastern europe in the 19 century in a period when borders were changing very rapidly. and the story goes that a woman is taking up washington in a remote area and the soldier rides up and he declares old woman, from this day forth, this man -- this land is no longer politically his imperial russian. she watches him go. thank god, i couldn't stand
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another polish winter. [laughter] thank you for laughing. i will pass those laughs on to my father and his father. like a woman in that story, we become used to the idea of the tech tonic plates of global power and influence shifting beneath our feet. we have become used to the idea that that america is going to play a decreasing role in the global political economy in the coming decade. now, there's something of a debate about whether america is in decline or not. we will get into the a little bit later, but it seems clear that if you look ahead 20, 30,
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40, 50 years, the global economy is going to be quite different and the u.s. role in it is going to be smaller. and that's a good thing because it means other countries are rising. it means that fewer people in the world -- we should celebrate that. within the united states though, it's provoked a for long sense of nostalgia. just look at the title of some of the best selling political books the past year, books like republic lost, the unmaking of american, that used to be us, that used to be us. what a pathetically sad and for long titles ideas. [laughter] it sort of reminds me my wife and me sitting on the couch at home looking at photos of when
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we were first dating. unit, she turns to me and says, you were quite handsome them. [laughter] that used to be us. well, i think that americans are getting bored of this loneliness. there was something powerful about that clint eastwood super bowl ad. it's halftime in america, although somebody pointed out to me that that means america is going to end in 20 to 46, or thereabouts. maybe it's earlier in america rather than halftime, but it captured the idea that people want to know what's next, how do we get out of the situation we are in. and a lot of the debate around the question have to be focused on the homefront. and, of course, that's aground
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off which the election is being fought. the role of the state and economy, what is the nature of government, the important questions. much less focus has been on the international dimension. and the question here is, what is america's role in a world where within a few decades it will no longer be top dog? and that's one of the central questions that i was trying to address in writing this book. now, when the financial times sent me to be there andes correspondent, great have become probably the best title in journalism, in 2004 they sent me to be there andes correspondent. i would be lying if i said they were great expectations back in london about what i would produce in terms of news.
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so although i later reported from venezuela and chile, i was initially sent down to cover peru, bolivia and ecuador. what exactly sorts of countries regulate prop up on the front page of newspaper. i had a very memorable interview with a senior answer passionate editor and he called into his office, and he said, you know, this is great. you have shoppers, the oil industry. i said, no, i'm not actually covering venezuela. he said oh. well, you know, you've got the war on drugs. i said no, i'm not actually covering columbia. he said oh, what are you doing? i said, he said what any other do you? he said i'm covering peru, bolivia and ecuador. there was a long pause. and he said, while in that case,
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go and get a suntan. and i took that advice to heart. but actually it was an incredible interesting and exciting time. six months after i got there, the government was pushed out in ecuador, and six months after that the government was pushed out in bolivia. and morale is, a firing -- fiery indigenous nationalist left wing radical president was elected, and within six months he had nationalize the gas industry. and six let's after that roxio carrere, another radical leftist, allied with hugo chavez of venezuela president, he was elected in ecuador. so it turned out to be an incredibly interesting time and i to i did end up getting a few stores in the front page after all. after going through all of this wonderful experience for years,
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i said to myself, you've got to write a book about this. but it wasn't until they sent me to chicago where i'm currently the correspondent that the book really came together. because i came from a continent that was booming to a country where less than a year after i arrived we were plunged into this economic crisis that we are still struggling with today. and it wasn't just economic growth. it wasn't just that they were growing faster than we were. it was a whole range of indicators your so while unemployment is stubbornly high in the u.s. and is still high, although it is coming down, in latin america jobless rate had been falling. and while poverty and inequality had been getting worse in america since long before the financial crisis, in latin
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america, poverty rates have plummeted. and while the middle-class in america felt squeezed and under attack, in latin america tens of millions of people were entering the middle class for the first time. now, for a long time people think and write about latin america have urged the united states to become more involved your and that is a call to echo in my book, but there's a difference. in the past, that call was always made on a premise that latin america needed to be rescued in the to be saved. i say in the book that latin america was cast as sleeping beauty, and the united states was the prince who, if he could only be bothered to cut through the weeds, could kiss the sweet
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back to life. and this ignoring, this inattentiveness, led a number of high profile writers about latin america to call the continent the lost continent, or the forgotten continent. interesting phrasing. the assumption there was that it was forgotten because it was forgotten in washington. but it wasn't forgotten in beijing and that wasn't forgotten in moscow. and it wasn't forgotten in tehran. and after being lost, you could argue that it was the united states itself that was increasingly lost. and unwilling superpower, unsure of how to wield influence in this fast changing world.
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i do believe that the united states is in relative decline. not enough so decline. i don't think we'll be in economic crisis for the next 20 years, but we are in relative decline. and as they say, what i think that means is something very positive. it means that emerging countries are rising at. people are getting richer. they are starting to realize the potential of their vast population, of the vast natural resource wealth in the case of latin america. what does that mean to the united states? what it means is that means a new kind of foreign policy. it means new allies. and specifically new allies, among these emerging powers, the companies -- countries that are going to be the global superpowers of tomorrow. so in the book i argue there is
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no more natural partners of the united states among these emerging reasons -- regions that latin america. the geography is important but it's not just geography. socially and culturally we are actually very similar. more similar probably than the united states and any other emerging region. and, of course, this is the hemisphere where democracy is the norm. but at a time when the united states needs this relationship more than ever, its influence in the region has never been lower. and the principal reason for that is because the united states voluntarily withdrew from latin america after 9/11. now, i don't want to suggest that before 9/11 everyone in the
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united states was very engaged with latin america, but it went in cycles in ways. so in the 1990s you saw a wave of interest around the time of the signing of nafta, for example. and in the early days of the george w. bush administration, he talked about putting latin america at the heart of u.s. foreign policy. you might remember his first foreign trip was to mexico. but 9/11 changed all that. and the focus shifted for dramatically and very rapidly to confronting this firebreathing radical islamism. and latin america dropped down to the bottom of a long list of foreign policy priorities, and inspite of a lot of rhetoric, it's pretty much remained at the bottom of that list ever since.
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and this created a vacuum. and into this vacuum came china and russia and iran, but principally china. and the focus for those countries was both the natural resources that latin america possessed in abundance, particularly south america, but also the idea of establishing a foothold in the region that washington had traditionally regarded as its backyard. a second reason, and the reason that i was privileged enough to witness as a correspondent in latin america was the rise of a particular form of nationalist left, but to symbolize a wider change and a wider shift, and that really was a shift to
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economic nationalism, or resource nationalism. and that was in sharp contrast to an earlier period in the '80s and '90s when countries across latin america had open up their economies, liberalize trade, invited foreign investors under the broad rubric of what was called the washington consensus. and that was a process that the united states enthusiastically backed. and the basic idea was that there was only one way to grow your economy. there was only one way to develop it. and it amounted to removing the state from the economy, eating out of the way, and making yourself as attractive as possible to for investors with low tax rates and all the rest of it. and what you've seen in the past decade is a reaction a backlash
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against us. so the state has come back into the economy, and taxes have been raised on foreign investments. foreign investments have been squeezed. this is typically thought of as happening in two different ways. the two left of latin america. right question of the have left, the nationalists, hugo chavez, a row is, correa, cuba, nicaragua, occasionally argentina because we added to that list. and then you have your moderates, which people principally means brazil when they say that but they also include countries are chilly and peru. some people call them the carnivores and the vegetarians. two very different counts. but i think that a lot of this reflects a focus on politics and
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rhetoric. and when you strip that away and look at economics, which is what we're really talking about, what they are actually doing, there are many more similarities between the carnivores and the vegetarians. brazil is a great example of this year i just want to give two quick examples of what i mean. because in brazil, you've seen in the past couple of years a rise in resource nationalism. and what i mean by that is a rise in countries using their resources to further political and. not just economic growth, but actually political and. a reversal of those washington consensus policies. so the examples i will get from brazil come from the oil industry first and the mining industry. in the oil industry, the
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1990s, brazil and the monopoly, that states can head over the oil sector. they invited private companies to come in. as i said, as many other countries did the same. and what you have seen the last couple of years is to have become much more nationalistic. so most foreign companies have come in on new projects in the past few years have been given secondary roles. and these fast eye-popping deposits they have discovered under a layer of sorts offshore, if you're a foreign investor to go in there and a joint venture -- has to be operate and have to have at least a third of the projects. so that's the state coming back in. at the same time, what you've seen is the state becoming much
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more involved in what it is doing pixel in the past couple of months you have seen them telling them to use local equipment contractors which is something they don't know soda want to do because there's some doubt about their reliability of those contractors. interfering. but it's not just anything in state companies to give also seemed and interfering in the private sector. so in the mining industry last year the world the second biggest mining company, face a brazil, the brazilian estate force of the chief executive last year because they didn't like his proposal to cut jobs. now, it is a private company but it's effectively controlled by the brazilian state because the public pension funds are the biggest shareholders. so the force of the chief
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executive. so you see, the state coming back in. you see the government interfering much more over the management of state enterprises. and you see the management, big government and differing in the private sector as well. so brazil is an example of economic nationalism. not to the same degree as venezuela but there's a continuum there. the idea that these are two different ideologies, i don't think it's quite accurate when you look at what they are actually doing in terms of their economic policy. and there are other examples. actually there was a fascinating report in the economist a few weeks ago about state capitali capitalism. and it was revealing to me that the three examples that they chose were china, russia and brazil.
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38% of the value of the stock market in brazil is made up by state owned enterprises. so this idea that economic nationalism is something that can find the hard left to the carnivores is not quite accurate. now, i don't think that economic nationalism is about to with her only in south america. -- with her weight in south america. our doubts in venezuela over chavez future. are periodically does in other radicals let countries like ecuador and bolivia about how long their leaders were less. their predecessors so we didn't have very long time in office. so far they have been better. they might not have them might run out quite soon. but whatever happens i think it's quite likely that this impulse of economic nationalism
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will be something we will be dealing with for a long time. and it comes at a time when here in the developed world we have been going through a process of existential angst about our own economic system, our own free market system. the very system that we were telling these countries to adopt for decades. one of the key criticisms of hugo chavez is venezuela, and it's a valid criticism from is that it's unsustainable. i agree. it's unsustainable. but it's a financial crisis has taught us anything, it's that her own system is also unsustainable. i mean, is the eurozone sustainable? with the over-the-counter
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derivatives markets that gave us the credit default swaps and the collateralized debt obligation, where they sustainable? is the u.s. federal debt sustainable? and this questioning of the role of the market, the role of the government in the economy, this is an international debate. we are very focused on latin america, but latin america is an example of what's happening across the world. there's a very vibrant, very important debate going on about different ways of developing your economy. and it's not clear within that debate that the free marketeers are winning the argument. now, i don't want to take up too much more time because i want to leave room for questions. i do have some policy recommendations about what the
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united states should do to become more engaged with this region. i think there's a real opportunity here. i don't think the opportunity will be there forever. but i think that there is, it is a moment when the united states good -- could correct this inattentiveness. i think it's a big strategic mistake not to look at lot america more closely, not to be focus on the. not just as a part of western hemisphere relations, but as part of the u.s. global strategy. if the united states has no influence in latin america, how can it hope to have influence anywhere? i think it's time to think strategically. latin american policy has been too often clouded by ideology. washington needs to correct
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this. it needs to become more engaged. it needs to become more involved. not for the second -- for the sake of latin america but for its own sake. thank you. [applause] >> on that last note i think you'll find a very perceptive audience. let me ask the question first as an economist, a private bank, how does this work for you, and this idea, do you buy the idea that latin america has reached economically speaking, has reached its take on stage and suddenly the united states is in the dust? there's very little detail about the decline of u.s. manufacturing. >> i think first of all we have south america and i think his book is more focused on south america that all its central america. i was preparing for the panel today. i was actually looking at the
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average gdp growth on a per capital basis over the last 11 years in latin america. and i found something which i found quite surprising. i'm going to ask a viewpoint of the audience. what was the average gdp growth of the per capita basis of mexico over the last 11 years? more than 2% or less than 2% per year? over the last 11 years? who would say more than 2% a year? who would say less? i would say -- okay, so actually it is much more than that. it is the .8%. so gdp growth on a constant basis for the last 11 years on average was .8%. in latin america in the southern part of latin america in south america, -- the region really that has benefited from commodity price, the rise in
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commodity price -- [inaudible] central america has not seen that much. what i would like to combine two and i think it's one thing she would say, latin america has been a lost continent for the u.s. i think is true for most emerging markets, true, and for a certain extent it's also true for issue. i mean, china a few years ago was -- [inaudible] and really for the rest of asia. i think that's extremely important. but what is concerning me, the point talk about the differences between what's happening in mexico and what's happening in latin america, what's concerning to me is latin america like many is falling behind which compared to growth in asia, even growth
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in south africa. [inaudible] it's done very good on the agricultural side but it's very poor on the industry, manufacturing side, and more importantly -- [inaudible] i know there are certain countries in latin america were education is a very important day of investment. but by and large in latin america, that education has been lacking. investment infrastructure, savings rates in latin america, extremely low compared to issue. so i think there are a couple of things which are concerns when it comes to latin america. one is you mentioned sustainability of growth. i don't know how much what the stability of the current growth we know it is greater by china
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and greater by increasing -- [inaudible] in latin america when we know there's long-term investment in the continent. so i totally agree with your comments that we have to rethink the way we look at latin america. but i'm very concerned, hence the title, some parts is prospering, yes. how much of that is short term, how much will be carried out in the future, is very concerning to me. >> the title as i clicked on south america -- >> i know. that's what i -- >> and for very good reason, which you point out. there isn't one in latin america
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-- there are many countries in latin america. they are all different. but broadly that are three regions we talk about. there's mexico, north south america, central america and south america. and you're right that the focus of the boom has been in south america, absolutely. your right to say it has been fueled by natural resources. and, in fact, it's worse for central america than even you wished is not just central america doesn't have the natural resources to benefit, but they have emerged as a competitor to china because they produce, they are a manufacturer. they don't even have the natural resources to balance that out. something to situation for central america is not good. that's what south america start prospering. and i celebrate the end of the. i don't think there's anything bad about the.
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i think sometimes those of us who are focused on latin america, we used to think so pessimistic that we've missed the fact that this is a wonderful moment. but you're also right to suggest that we're now into a different debate. we're into a debate about how to spend the proceeds of this wealth, and that's a very important debate. the point i was trying to get across, i just want to come back to that. and it is a kind of perception in that queue left rubric that the good guys are deep resilient. we should all be like brazil. and the bad guys are the venezuelans and we should not be like venezuela. and you see that debate interestingly playing out right now in venezuela because the opposition candidate has said that he wants to make venezuela more like brazil. i don't yet see that even in
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brazil. in fact, any of the countries that are benefited, they have not yet resolved those questions that you talk about. so actually this is a great challenge for the whole of south america is this challenge of spending. but have greater we moved on to different debate when i'm finished it when the time economic crises. we are not talking about the structural problems. we are talking how do we spend the proceeds of wealth and how do we do that effectively to make sure that this is a boom that continues. it's an important debate about and is going on in latin america. this is not likely the only people talking about this. they are aware of the problems and they are certainly aware of the challenge of china, something that you guys have written about all along. the challenge of china and how china is a relationship that at first the door was wide open, and now they are realizing it has to be managed a bit more carefully. i think they are aware of that, i celebrate the boom and i celebrate the fact that we are onto a different part of the
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debate. how do we spend our money on education, on infrastructure, reducing poverty and inequality, these very things that have held development back. that is a change from the past, when the policy prescription was about, as i said, getting the state out of the economy, liberalizing it so. in the past we placed two emphasis on spending and to which emphasis on headline growth. there was a very interesting election that happened last year in peru, and peru has been growing phenomena. those of you who follow the region for banks and other financial institutions will know that peru has been -- point has been its growth has been among the fastest in the world. it's been growing at rates like 9% a year. and last year they elected a
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president who potentially would have overturned all that. so after a year at which the crew at my present the elected leader who has been a radical leftist. in fact, so give that timeline six-month after governor, this happened six months after. in between, peru almost with the same with. that would've been a very difficult had that been. it didn't happen. it happened last year. the same guy got elected in tragedy. i think a lot of people were scratching their heads. how could a country grow 9% a year and still collect this kind of guy. and the reason was they had not used the proceeds of that growth, did not spread the wealth. and it grew with the problem of social inclusion. and he's made that a focus on rhetorically made that a focus
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of his political strategy. so i think -- [inaudible] >> what the heck was that? >> those questions are important but i think i welcome that, that debate. we'll get to. i think it's a very healthy debate to a. we are at the level of how do we spend our money effectively? >> i was just curious. i think it's an issue that we see -- [inaudible] we are in a different world. expansion of the middle class. [inaudible] at the same time that our some clouds. one of them is commodities. when it issues its we have the
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foreign exchange is appreciating the answer but he knows it's very, very high. which is creating some very serious issues with an entity, on the exports. so we have got some very complex dynamics linked to this new nature of growth which is leading by china. and then i decided the question of the government is how are we going to be investing in the long-term, education and infrastructure, innovation to make the country more competitive. over the last five or six years we haven't seen really those countries that are leading in innovation. brazil, if you look at the -- hasn't really got up. i think, because we talk about the question, i would love to see -- [inaudible] i'm not sure whether we see that today. in the past we had new ideas in terms of a, fashion economic
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development. i would love to see latin america come to the world and show a different type of economic growth, different types of model for sustainable growth. do you see that happening? are their debates? >> i mean, i think the rest of the countries in south america would probably roll -- [inaudible] you know, i don't think there will necessarily be a latin american model or a south american market frankly i want to get away from the idea there is one model per block, or whatever. i think each country has its own characteristics that require a different kind of policy. but i do think that the focus in latin america shifted, south america shifted much more to social spending, as i say. and the focus has shifted away from a pure concentration on
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headline growth towards these other factors. you mentioned labor productivity. you talk about implement. you talk about poverty. there has been a lot of focus on those kind of issues, and i think that the countries are unaware of the problems. it's not completely -- completely passing them by. the infrastructure talked about a lot and bolivia which is a case of the country that did go to the radical left has been going through the past few months a very, very fierce debate about building a road that is kind of scene by proponents as essential to its economic development. here's a case of a leftist government fighting its own supporters to provide infrastructure. there is that debate going on, and the big cats will be to what extent depending -- this thing on education, on infrastructure, on antiparty programs is maintained and is ranked up in the years ahead.
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>> turning now to political science. explain a little bit about what -- [inaudible] >> my own take, i think it's an excellent book, it has great stories and very provocative, has to do with the sort of perhaps the way the book, particularly the title and the first few pages are framed, and to think it has much more to do with the editorial bandwidth yourself having written books. i know editorials with provocative titles in there, but you can have a different sort of come and i think you can bring that sort here, a different story on what actually happened to latin america didn't do anything to give the commodity boom. sure we're lucky but we just won the lottery. the question is what you can do when you win the lottery, and i
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think that part of the success has to do with them, actually falling the washington consensus. if there's any criticism, it's against washington for not following the washington consensus, particularly in terms of fiscal responsibility and more transparency. another features that were central to the washington consensus. and you point this out, too. there's a lot of criticism against neoliberalism. in part the success of some this left wing government has to do with them being fiscally responsible. now, they are fiscally responsible because -- the question is what thing to happen when the situation times a bit and the oppressed to be a bit more responsible. and there the evidence is not perhaps optimistic over
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reassuring as one would like to. even the positive conditions these countries have, growth have been very good but investment and infrastructure, education, even poverty has lagged behind. much less than they could have, even the levels of economic development. so i'm not less optimistic than your. if you think about countries like argentina, which is perhaps a very, very interesting case of openly responsible policies that they can get away with because they have extremely positive terms of trade to the big problem in the 1950s and '60s, -- were the terms of trade were declining. their prices were going down.
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and now the terms of trade a very positive and they are really sort of blowing the opportunity to they're not taking a bunch of the opportunity to transform those positive forms of trade into long-term investment. they implement subsidies that are very regressive, that are going through very difficult to sustain, one, the boom ends, and they are not making the type of investment that they should make. so in that sense i wish i could be as optimistic as you are, but the history of latin america has experience with a also want to cut economic booms and when the boom is over they were left with nothing. [inaudible] >> i mean, i think those are excellent points. i agree with most of what you said.
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it really all comes down to the question of sustainability and there are two elements. one is that you have, you have countries like argentina, like venezuela that a lot of people think are doing things that are just unsustainable. so even if you agree with them, this is not the way to reduce poverty. i think the reduction of poverty in venezuela has been dramatic and far ahead of i think any other latin america countries that is not sustainable. how are you going to sustain that. so that's one thing. and i agree with it. me, the book, i dedicate a whole chapter as to how unsustainable venezuela is. so i got any problem with saying it's unsustainable. in the book i say that the people who support chavez actually portray venezuela ask hundred socialist paradise. and his critics often portrayed a kind of bleak prison. and actually it's needed at its
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kind of consumer orgy where because inflation is so high, as soon as you get any money you have to buy things immediately. but because of all the restrictions in place, this kind of nothing to buy. so we have a very distorted of wacky and wild and wonderful. i imagine as a party of studio 54 in the old days where and when is having a wonderful time, but, you know, in the morning where all going to have the mother of all hangovers. and so i do think that it's unsustainable. and argentina has a lot of distortions but a funny thing about these distortion is what you get into, or contortions, once you get into that situation you can only get out of it by having more distortions. so it's becoming, it's like telling lies on lives. >> so that's one part. the other part is the commodity
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aspects. so all the countries in south america, particularly have benefited from incredible surge in historic surge in commodity prices. aside from chile, which has great a sovereign wealth fund with the proceeds, it's hard to argue that any of them have successfully managed it. so, you know, on the one hand you the criticism of internal policy and on the event you have a criticism that they have become too dependent on the. in fact, it's kind of hard to see how they could have become more depend on that because we sizes to six like 75% of country exports are raw materials, but that's a function of the price increase. that was inevitably going to happen. did they do anything to cause that? the on sort of improving the relations with china are recognizing that the united states pretty much ignored in and they needed to diversify,
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no, they didn't really do anything to do that. it's my wife's criticism of the book's title, critical of the tunnel, my wife's criticism is that it should be how south america prospered and stop listening to the united states. so the order of is the other way rather an obvious and obvious i prefer to do it the other way. but i think that's a little bit of both. i think you saw, you saw a reaction against the washington consensus why. because although the washington consensus policies help countries deal with her debt burdens and hyperinflation, undoubted achievement, they didn't really at least an initial phase bring economic growth or poverty reduction. if you look at the data, poverty pretty much stayed the same, and between 1998-2003 we had once been called a lost decade where there was stagnant growth in latin america. so i think they did start to
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turn the gates of this. it was the idea when the boom came this time that we would do things differently. and that's pretty much what happened. there is a whole other debate that we don't want to get into here about super cycles and how sustainable the market is. but i think that in certain commodities, take food, it's hard to argue that we are going to need more food in the next 20, 30, 40, 50 years. so it is a good thing to be growing. into long-term. on other commodities maybe you can argue that it's going to be short term. but i think there is still some time in this boom left, even if china continued to correct. they're still some time left in this boom for latin american country to seize the opportunities that are present presented. >> one of the interesting elements of the book is discussion of the overlay of
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political change, the growth of the indigenous movements, sort of the growth of emerging from nontraditional outsider parties. i'm curious, from your perspective how much do you think the overlay of economic boom and political change, how much will that political end economic growth sustained these political movements? hal read very, very provocatively and witty about. >> well, we do have concerns of past experience in latin america. precedents have for the past 20 years or so, or at least successful, many of them have campaigned against -- if the economy is growing they did not think indigenous and keep economic policies that were in place. so we don't see changes in terms of economic policies when the economy is growing. we only see changes when the
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country is in stagnation and they can choose what of the right policies, the wrong policies. if the economy is growing, if it ain't broke don't fix it. they come in and they said well, i'm going to change all those things that eventually, in the meantime of the situation. now, i do think some progress has happened, particularly in places like they do, and there is positive aspect to morales being in power. and their the fact that now result of the democratic process is that people left, or -- [inaudible] i think it's a positive aspect. the question is whether morales be a nelson mandela? i think it's still unanswered. but it is true that if latin american countries were to be
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successful for have to be more inclusive and that has to be steps to make latin american countries more inclusive and i think that's a positive component. however, and let me use a metaphor here, many regard just like going into a bar, you see people drinking but you don't quite know who are the alcoholics, and when you order latin america today because of the commodity, you see latin american countries doing significant steps in reducing poverty. but the fact that they are all reducing poverty doesn't mean they're all doing it the right way. perhaps in argentina, why some countries are not doing it the right way. it's an easy example, particularly to use, give us information about argentina almost daily on how wrongly they are doing things.
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but in the case of argentina, they have grown so fast and get poverty reduction has been in terms of their economic growth, has been very limited with the kind of return in terms of poverty reduction for the economic growth is very, very meager. it's not that successful. >> do you want to comment a little bit on, defend the washington consensus a little bit? this is being kicked around all the time. >> the branding of washington doesn't help. >> go ahead. >> one of a think washington presidents many to mention, deregulation policy, too much of, privatization can probably also, there were issues in terms of privatization. fiscal responsibility i think this is something that has really faulted. one of the reasons why brazil is
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doing so well today precisely because of fiscal responsibility. inflation targeting, reducing inflation, indexation of the economy. all these things have been good. fighting inflation is one of the reasons why we have the brazilian miracle today. i agree with what you think in terms of certain elements within the washington -- should be followed by washington and european countries. i mean, the issues that europe is facing today is very much depend on latin america. so i really think there are some important elements that latin america should take. one thing also which i would like to pick up on, you were saying, hal, is i see a lot of complacency in latin america today. i don't want to see, you see some of the worried got here. i share the optimism and i'm extreme, especially coming from economic get them back which want to say one thing.
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we did a study a couple of years ago that attitudes towards retirement. and we surveyed many, i think 65 countries in the world, asking people about what they think about retirement, whether in their life they will have, or into retirement, -- [inaudible] very interesting question to see how you see the future. and it couldn't have been more clear, more starker. in emerging countries they believe in the retirement they would be better than the paren parents. in the developing markets, the other way around. the future is going to be more difficult than the past. so i think this attitude towards growth and excitement is fantastic. this is i think towards those countries, the developing markets, but what worries me a
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little bit, you see the complacency in many places, in particular latin america. i love the quote that you had in your book, this crisis, talking about the crisis in 2008 and he is, that this is the white man blue-eyed type of crisis. it's not our crisis. it's you. with nothing to do with it. but the reality is that growth in brazil hit a wall at the end of 2008. and the only reason why brazil really recovered very quickly, it's not because of, you know, typical measures to promote the purchase of cars in brazil, or to spur economic consumption but it's because china, at the end of 2008, the role of prices went up. so i think there's a lot of
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complacency and just, latin america is rising the wave of commodities. and when it comes to hold, and it will come to a halt because it's really depend on china. it's not depend on the other emerging countries. it's not going to be followed by india. the commodity intensive miss of growth in china has gone from 100% 10 years ago to 160% now, combined with the tremendous growth that china has seen. this is what has led to the commodity price rise over the last 10 years. u..
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>> i particularly think of a cuban battle and the war on drugs. united states the united states is on the left and right against it. they both have failed policies and they both have not -- they have been in place for decades. there's a lot of inertia. generally i think that there are a whole range of initiatives that the united states can do
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with the latin america if it were able to establish a playbook or permanent dialogue. if the organization of american states is in a bad state of the current time, it is not clear if it can be given a rebirth or will just die quietly. whether it is reborn, there needs to be some way for permanent dialogue between the united states and america. particularly the big countries. there were two instances in the last couple of years between the united states and brazil where there was a real split. one was in 2009, and one was over the plan to get over the iran crisis by having an exchange of enriched uranium, which involved brazil and turkey
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mediating with iraq. in both cases were a split for the united states. to my sources in washington, i understand, at least some of that split -- in both instances, a lack of communication happened. that should not be allowed to happen. i think that there needs to be stressed on to mutation to occur. plus, initiatives. initiatives could come out of this discussion. the third thing would be a immediate and practical example. the obama administration unsent administration. i think it makes as much sense or more sense to back brazil.
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it short of backing that aspiration, i think that was a strategic mistake. the brazilian president was coming to the united states very soon. i think it would be a very good suggestion to back brazil for a permanent seat on the u.n. security council. and i think it would show an attempt that the united states wants to engage in building a partnership to make this more of a region -- a coherent region, not where we tell them what to do, but where we listen to each other and back each other up and back of our aspirations. >> questions from the audience. if you have a question, raise your hand. >> thank you.
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because you touched on cuba, gives me away -- >> even if you hadn't gone away -- [talking over each other] >> yes, particularly, we have coming up the summit of the americas coming up in april. in many ways, the last summit was obama's high point. i mean, he sort of came onto the scene, he acknowledged them as hillary clinton did that cubans were doing all this great health stuff and i didn't know about it. and he was polite to president chavez. it sort of gave everybody a sense that oh, yes, something different was happening. and then partially honduras and partially distraction, i think. in a sense, the question comes back on the table with catania.
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the u.s. is saying they shouldn't come because of democracy issues. the oas is saying it is completely up to colombia to decide. as far as the oas is concerned, it is the decision of the host country. i think it is not just because of my peculiar interest in cuba, but in a larger sense, i think the question of how obama approaches this summit, and solves the problem of cuba in a gracious rate rather than a non-gracious way, i think it is symbolic. is that symbolic of where we are in terms of relationships with the hemisphere?
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>> well, sure. that is a great question. i do think you hit the nail on the head. he that is a symbol. it is interesting that when the brazilian president came in, she refused to criticize the cuban regime. generally, the point i was trying to make about ideology, one of the reasons in the world is that u.s. foreign policy is guided by an ideology. we deal with saudi arabia, we deal with china. we may bring up issues of human rights, but we don't stop trading with them because of that. and of course, there are many other examples. that is a real strategic area that allows us to have our relations clouded with latin america. latin america has much too long
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been captured by domestic political interest, whether it is cubans in miami worry people who are involved in the war on drugs. that is not a strategically to think about foreign policy. as i said in my presentation, if you think about the united states role in the decades to come, you don't have the government run by small groups. that is the wrong way to do stuff. cuba is a symbol. it doesn't really matter to anyone outside cuba whether there is an embargo or not. it imitates a kind of an approach to the region, which is, here is what we are trying to do, and then we'll talk. >> this is just a quick comment on the security council.
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it is a difficult challenge for the u.s. and brazil to deal with mexico. it is not simple for the u.s., as an policy choice. i totally agree with you with the war on drugs. then we have domestic issues. i agree with you that the u.s. policy with cuba is captured by domestic interests. it is also run by a cuban regime. in recent mike, [inaudible] in discussing cuba, you brought up a point about the two latin american countries not being able to get along. a couple of things before the september 11, attacks, -- they
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still chose to punish cuba over [inaudible] it doesn't say a lot about human rights in a number of other issues that people should know about because they were victims of human rights violations. the case of cuba is not just a case where the united states is dealing with a policy in the cold war logic, but latin american countries are being pretty are responsible of the deal with cuba. >> the cost of the embargo, i don't think they like people telling them what to do. if you remove that, it would change the game completely. you are absolutely right to say that castro benefited from the
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embargo. >> there have not been profiles in courage when it comes to latin america. other of their questions? there is a question over here. >> is related to the previous question. what we seem to be talking about is the rise of a consensus. you have a powerful nation that will get involved in other nations economies without conditions. it is scary, of course. the u.s. has extensive measures in regards to human rights,. >> that is a good point. we talk about it clearly and we try to ask questions. thank you.
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the aid is unconditional. is there a risk in nonnormative behavior. it's a great question. a lot of people are talking about beijing's consensus. of course, what it indicates is that there is no consensus. the chinese will invest anywhere. they don't ask questions. they have been told what to do for so long, that is very refreshing. if there is democratic change in places like cuba, if there is improvement in, you know, if democracy is strengthened in latin america, it won't come from china, of course. it provides and affords an opportunity for the united states, which has the expertise and knowing how to build a partnership -- we are all
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democratic. we do have the same goals in mind. that is one partner. and then also be economic aspect. latin american countries are aware of the dangers of the chinese relationship and the fact that there is a downside. we talked about central america, the brazilian car and textile industries, they are all very worried. there are a huge number of complaints to the world trade organization from latin america to china. it is a nice break, but there is no consensus as there is a policy that has provided benefits. and i think there is a great awareness of the downside as well. >> i think the chinese have a very commercial attitude towards
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their business in latin america. want to improve their access to the commodities that they extract from the region. it is the same thing. they invest in highways and railways. they want access to the resources they need, they don't ask questions. at the same time, investing is a favorable long-term outlook for the country. i don't think it is a consensus, i think it is an ambivalent relationship. the jury is still out. especially between china and latin america.
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